This Australian startup is about to trial a system that could see drivers being charged for every kilometre they drive on the road

Getting motorists to pay their road taxes by the kilometre sounds crazy.

But that’s exactly what a new Australian start-up – which has been shortlisted for the world’s second-richest economics prize after the Nobel – is trying to do.

Clearways, founded by University of NSW engineering adjunct professor Jamye Harrison and former NSW transport ministry policy director Russell King, is trying to convince government that drivers can be sold on direct road user charging.

The team is proposing a six-month trial with 50,000 drivers to test whether drivers would “buy” into a system in which they are financially rewarded for avoiding peak hours, staying home or using public transport.

Mr Harrison, a former head of Deloittes’ transport practice, argues the system won’t hurt the federal budget, which relies on more than $15 billion a year from fuel excise, and could even kill off congestion in major cities within a decade.

It’s a bold claim based on the idea that if governments continue to let voters believe that driving on roads is “free” there will always be traffic jams.

Using technology that would tap into a car’s existing on-board diagnostic system to record distances and roads travelled, drivers would be able to opt out of paying fuel excise – which has risen to 40.1 cents per litre this year.

“Rather than the government creating a new tax to charge everyone for use of the road, we thought about how we could design a product that drivers actually wanted to buy,” said Mr Harrison. Read more